Abstract [en]

The start of electricity market deregulation in France has engendered the entrance of new actors on the market. Among them, some companies identified as aggregators are becoming a symbol for the French market deregulation. Most of these companies focus their development on the non-automatic Balancing Markets (BM), and aim to provide real time power margins demanded by the Transmission System Operator (TSO), by shedding domestic loads, such as electrical heaters. The sale of load-shedding capacities is commonly referred as Demand Response (DR) or Demand Side Management (DSM).

The paper aims to understand more precisely this innovative business model and to see how could it be improved and exported abroad in Europe, especially in Sweden. The paper starts by highlighting the success factors identified for DR deployment in France, Germany and Sweden. Subsequently, a simulation model is developed to assess the profitability of Household DSM on the Swedish tertiary BM. The model can take into account various scenarios regarding the investment costs, the competition from Electrical Vehicles (EVs) and the different market rules, which can exist in other European countries. The simulation model focus on the Swedish markets exclusively, considering the potential from Household DSM and the competition from Electric Vehicles (EVs) load-shedding on the Balancing Market (BM).

The results from the performed simulations indicate that the investigated DR business model is not economically viable on a short term. However an involvement into the Swedish peak reserve market, or the commissioning of a capacity price on the BM could allow increasing aggregators’ profitability, depending on the capacity price levels. The model shows that the Aggregator can easily meet the technical requirements of the peak reserve market by applying smart energy management strategies.